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The Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) recently did not recommend the approval of Vivus Inc.’s (VVUS - Snapshot Report) weight-loss drug, Qsiva. The CHMP arrived at the decision at its October 15-18 meeting.

The CHMP rendered a negative opinion due to concerns over the potential cardiovascular and central nervous system effects associated with the long-term use, teratogenic potential and use by patients for whom Qsiva is not meant. Vivus intends to appeal against the negative opinion. The company also intends to request the CHMP to re-examine its negative opinion.

The negative opinion issued by the CHMP did not come as a surprise. Last month, Vivus had announced that it expected the CHMP to recommend against the approval of Qsiva in Europe. The company’s expectation was based on a preliminary feedback provided by the CHMP.

We note the drug is already available in the US under the trade name Qsymia. Qsymia was approved by the US Food and Drug Administration (FDA) in July 2012. The FDA cleared Qsymia as an adjunct to a healthy diet (low on calories) and increased physical activity for chronic weight management in obese (Body Mass Index, or BMI - 30 or more) or overweight (BMI - 27 or more) adults suffering from at least one weight-related co-morbid condition.

Neutral on Vivus

We currently have a Neutral recommendation on Vivus. The stock carries a Zacks #3 Rank (Hold rating) in the short run. We note that rival company Arena Pharmaceuticals Inc. (ARNA - Snapshot Report) is preparing for the launch of its obesity drug Belviq along with its partner Eisai and Co Ltd. (ESALY), which got FDA approval in June 2012. Orexigen Therapeutics, Inc. (OREX - Snapshot Report) is also developing a candidate, Contrave, targeting the lucrative obesity market.

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